New Delhi: At a time when political parties are coming up with poll promises like job guarantees, OECD, a group of rich nations, has found that nine in 10 employees in India do not have a formal labour contract and social security benefits such as advance dismissal notices.
As per a study by the Organisation for Economic Cooperation and Development (OECD), nearly 370 million people in India do not have “formal social security”, which translates into nine out of ten employees in the country working without such benefits.
“The financial crisis is throwing many people out of work, and in developing countries with no unemployment insurance, they are forced to take informal jobs with low pay, no protection and high risk exposure,” OECD said in the report, titled “Is Informal Normal?”
The study found that informal employment has reached record levels worldwide and this has severe consequences for poverty in poor countries.
Elaborating on the report, one of its authors Johannes Jutting said in an emailed statement that going by rough estimates for India, out of nearly 450 million workers, almost 200 million are employed informally in the non-agricultural sector.
“Approximately another 210 million workers are employed in agriculture, which if we were to assume is mostly informal, then we can say that roughly 410 million workers in India are informally employed.
“This what accounts for our 9 out of 10 figure,” Johannes Jutting noted.
In their manifestos for the coming general elections, various political parties, including Congress and BJP, have promised sops aimed at addressing the minimising the impact of global economic crisis on job market.
Congress has promised a minimum income of Rs10,000 a year under its job guarantee scheme and has promised to address the issues of economic slowdown through job-oriented growth, among other schemes.
According to OECD study, globally 1.8 billion people, which accounts for more than half of the worldwide workforce, are working working without a formal labour contract and social security.
The number is projected to grow to two thirds of the workforce by 2020 and could go higher if more jobs are lost due to the economic crisis and more migrants return home to informal sector jobs, the report said.
The OECD noted that about 1.2 billion people presently benefit from formal contracts and social security protection.
Lack of “formal social security” can be defined as not having full social protection nor entitlement to certain employment benefits such advance notice of dismissal and severance pay, among others.
In the Indian case, the absence of “formal social security” generally corresponds to workers employed in the un-organised sector, Jutting pointed out.
They are “mainly composed of workers in firms employing less than ten individuals who are therefore not subject to much of India’s labour legislation, as well as self-employed, own-account workers, contributing family workers and agricultural workers,” he said.
Pointing out that informal employment is a “question of survival for millions of Indians”, Jutting noted that due to the economic turmoil, it is these informally employed people “who will likely lose their jobs first...”
The author added that such people also do not have recourse to the social protections they need in order to help them while they look for a new job.